Moody’s, S&P Rally After Abu Dhabi Settlement: New York Mover

Moody’s Corp. (MCO) and McGraw-Hill Cos.,
owner of Standard & Poor’s, rallied after settling a lawsuit by
investors claiming the companies gave inflated grades on two
structured investment vehicles.

Moody’s climbed 8.2 percent to $59.61 at 11 a.m. in New
York and earlier reached $61.26, the highest intraday level
since July 2007. McGraw-Hill rose 3.1 percent to $53.59 and
traded as high as $55, the most since Feb. 4, the day that the
U.S. Justice Department sued the world’s largest credit rater
for inflated grades on mortgage-backed securities.

The plaintiffs claimed the defendants gave the Cheyne and
Rhinebridge structured investment vehicles inflated ratings in
two separate suits filed in federal court in Manhattan in 2008
and 2009. The rating companies worked with Morgan Stanley to
structure the entities, and their compensation was based on them
receiving the desired ratings, the plaintiffs claimed.